hands into the air-holes they brought out handfuls of rotten wood. One surveyor expressed himself that the ship was "as rotten as a pear." The inspectors then ordered the copper to be stripped off, and the vessel to be repaired. Before, however, proceeding with the repairs, estimates were procured from shipwrights of the cost of effecting them. The estimates amounted to upwards of 40,000 dollars, equal to about 8,000l. and to this sum would have to be added bottomry premium, and some other charges. Upon the ground of the great expenses necessary to repair the vessel and send her to sea again, she was condemned, and was broken up. The owners claimed for a total loss on their policy. The underwriters resisted this claim, and paid into court 50 per cent. of the vessel's value in full of all claims on themselves for repairs and expenses. They also brought evidence to prove that all the damages set forth in the documents for which they as underwriters were responsible could have been effected at Mauritius for about 2,000l., and in England for a less sum. The policy contained a clause admitting the seaworthiness of the vessel when the risk commenced, and the defendants did not seek to impugn the fact of her seaworthiness. The learned judge, in directing the jury, told them that the ship's seaworthiness at the time of the hurricane was admitted; that the law stood, that if the expenses of repairing a ship exceeded her value after repairs it amounted to a total loss, and they must find for the plaintiffs. The evidence on the part of the owner had been that

the value would have been less than those repairs, and the jury found accordingly.

Here, then, the whole question was in issue. Here were two distinct causes at work, the joint result of which was to construct the loss of the ship. Here was a great amount of natural decay discovered when a view was taken of the injuries sustained at sea. The underwriters freely admitted their liability in respect of the damages by sea-perils: but to repair these damages so as to put the vessel into the same condition as she was previously to the hurricane is one thing; to restore her to a perfectly sound, stout and seaworthy state is another. In the former case the underwriters stand by the terms of their agreement, and indemnify for those losses which they engaged to make good; in the latter case they would be doing far more than they undertook; they would be putting the vessel into a better and more efficient state than that in which she had previously been; they would be rebuilding the frame, restoring a time-destroyed constitution, and giving new youth to a ship that had traversed the waters for thirty years.

The question, then, is, to what extent are the underwriters interested in the large sum that was required to put the ship into such a condition that she could emphatically be pronounced seaworthy: and how are their rights affected if the alternative be chosen of selling the ship in preference to entering upon so enormous an expense.

It has been stated, above, as the rule in these cases, that whatever a prudent, uninsured shipowner would

do under the circumstances is the course which an owner insured should pursue. The rule is reasonable, and would be conclusive against underwriters, supposing that all the expenses took their rise from seaperils which those underwriters insured the owner against. But in the case before us it was not so. A very considerable part of those estimated expenses arose from causes which underwriters never guaranteed, and for which it is notorious they are not liable by the terms of the policy. It is a very different affair to abide by the consequences of stipulations we have made, and to suffer by those which come in extraneously to our contract, being such as we never took the onus of on ourselves.

In the course of the argument the late Lord Truro, then Serjeant Wilde, said, "I can distinguish no difference whatever between an absolute total loss and the case where expenses would exceed the value of the vessel when repaired, called a constructive total loss." In the effect upon the underwriter nevertheless, there are material differences between the two positions.

When a vessel is entirely lost by her sinking or by fire, no doubts can be entertained as to the fact of her loss and although suspicions may arise occasionally, and the destruction of the ship may be attributed to previous unsoundness or some other cause not touching the underwriter, yet the proofs being lost the question cannot be mooted. Not so, however, in constructive losses, where expenses are built up till they reach or exceed the entire value of the thing

insured; because in the latter case the separate members and materials of this consuming expense may be defined, and they may be distinguished into those which affect an underwriter and those for which he is not liable. Without denying that the thing is constructively destroyed, the work of destruction may be shown to have been carried on by two or more forces, and it may be possible to apportion exactly the resultant to the two or more powers. Thus then we hold, that though the accumulated expenses are indeed tantamount to the loss of the subject-matter of the insurance, they are not necessarily tantamount to a total loss as regards the insurers. The perils insured against by the underwriters may operate to only the extent of one-fourth of the whole necessary expenses; other defects, not insured against, may create an expenditure equal to the remaining threefourths of the value. Owners ought not to be allowed to cast all the onus on the underwriters and say, "Causes of a mixed nature have resulted in the loss by sale of the ship; and although three-fourths of those mixed causes are attributable to us and only one-fourth to you, nevertheless, we abandon the whole concern to you, and we claim the total value insured, the same as if the loss proceeded entirely from the risks you insured us against by the policy."

It is sometimes said that in a valid case of loss it is indifferent to the owner whether the underwriter completely restore the vessel to her pristine state, or pay him the amount insured. This is not strictly true. There is a difference in favour of the ship

owner, which he will not be slow to discover, on the side of total loss. For if a ship be repaired, at whatever cost, one-third is deducted from those repairs by the underwriters, and is paid by the owner on the score of melioration; whilst in paying a total loss, no deduction is made for the deterioration which the ship may have undergone before she was destroyed. The temptation to owners, and captains acting on behalf of owners, would be too great if they were allowed the option in cases of damages in foreign ports, either to repair or to sell the ship. The advantage to owners attending the latter alternative are so well known that the course would be constantly adopted.

In fire insurance companies the option remains with the office, after a fire, either to rebuild the premises which have been destroyed, or to pay the amount insured, and they select the plan most economical to themselves; and this can never be objectionable to the assured if he be not over-insured, and does not seek to make an unfair profit out of the misfortune. As soon as the people insure with a view to gain by a loss the whole character of the transaction is changed, and the system of insurance loses its innocence and value.

I have entered at some length into this particular case of constructive loss because it embraces nearly all the points which emerge from the subject. The result was unsatisfactory in principle, but it was not long afterwards corrected by other causes of a similar kind in which a different conclusion was arrived at.